Kroger weighs expanding a ban on Visa credit cards

LOUISVILLE, Ky. (WDRB) -- Kroger may be considering expanding a ban on Visa credit cards.

The supermarket chain's subsidiary, Foods Co., has already banned Visa credit cards in California. But Kroger may be ready to adopt the policy nationwide over the amount of money it pays in swipe fees.

Kroger announced the Foods Co. policy change on Monday, saying it was due to Visa's interchange rates, which merchants pay to banks whenever a customer uses a corresponding card at the store.

"Visa's rates and fees are among the highest of any credit card brand," Foods Co. said in a statement. "The savings will be passed along to Foods Co. customers in the form of low everyday prices on the items shoppers purchase most."

Foods Co. will stop accepting Visa credit cards - but not debit cards - as payment beginning on Aug. 14. The policy will affect 21 stores and five gas stations in California.

In a statement to FOX Business, a Visa spokesperson said the bank was disappointed by the decision and remained committed to working with the grocer to "reach a reasonable solution."

Retailers pay nearly $90 billion a year in swipe fees.

Kroger spokesman Chris Hjelm said in a Bloomberg interview that the parent company might follow the lead.

"It's pretty clear we need to move down this path, and if we have to expand that beyond Foods Co., we're prepared to take that step," Hjelm said. When the amount retailers pay in card fees "gets out of alignment, as we believe it is now, we don't believe we have a choice but to use whatever mechanism possible to get it back in alignment."

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